Where the poundage would be introduced would be in adding it to electronics and textiles and every other thing?

Mr. MORRIS. You also have records of the acquisition cost of material from which scrap is salvaged. That was one point that we did notice; that the acquisition cost on scrap categories apparently seemed to be arbitrarily equated to the scrap sale price.

Colonel PACKARD. It has to be, I think, for this reason: for example, this base had to go out and pick up a wrecked aircraft the other day. Well, all they got was a mass of metal. We couldn't really charge off the acquisition cost of the aircraft.

There are two ways of doing it.

Now the Army and Navy take exact costs they get from the sale. and say that is the acquisition cost, and they get 100 percent return. There is one other way of doing it, and that is to compare actual return against known sales in the past.

Mr. MORRIS. We could see the inequity in using the original acquisition cost for, say, a highly technical expensive item such as aircraft which becomes scrap, yet that figure is significant even if it is not used in comparing the original acquisition cost with the scrap sold. We got the impression that in the composite table which was prepared for the AF actual acquisition cost was kept out for a good reason, to present, possibly a better picture.

Colonel PACKARD. As you pointed out it is very difficult to identify the acquisition cost of an item that has been either destroyed or has been partially disassembled and parts removed from it. The determination of what to charge as acquisition cost and what to deduct for items that have been reclaimed, would be so difficult that we don't feel it is worth while.

Colonel RAMME. We have included in the brochure, on the subject you are talking about, the categories of properties sold and the acquisition cost and what we got for it.

Mr. RIEHLMAN. I have it.

Colonel RAMME. Vehicles, for instance. We sold vehicles which cost us $1,039,000. We got in return $144,000.

Colonel PACKARD. I would just like to go back to this percentage return again, Mr. Holifield. We plan to utilize the pounds sold by depot and by base and the percentage return. We will have the pounds sold and we will have the acquisition cost, that is not scrap but usable items, and then we will have the percentage return and we will get an average return for each of the depots. When we find one depot is high or one depot is low then we will go to the depot and say, "We want to examine your records by individual item and see what the reason is why you are lower than the rest." It may be because they have a different type of proporty for sale. Those records are available to us.

Mr. HOLIFIELD. We notice here on this list of bases, for instance, that the Norton Air Base gets one-tenth of 1 percent, while at Tinker Air Force Base in Oklahoma it is 5.7, and at Wright-Patterson it is 4.7. That doesn't necessarily mean anything unless you do go into the type of material which they have disposed of? If they are disposing of airframes and that type of thing as compared with usable vehicles, of course, they would get a much lower return.

Colonel PACKARD. And, we feel that by using the common denominator of pounds against acquisition cost against percentage of returns

and comparing all depots, then we can strike a figure of where a depot may be high or low and find out why. But, then we must go to that depot's records and use the individual item records, and type of property sold, which will give us a control on it. But at the depot or base only.

Mr. HOLIFIELD. I can see where the pound computation would give you a certain control of the broad management costs of handling, but that is about all.

Colonel PACKARD. We recognize that it is not a detailed tool but it does give us an insight on where we can go to get the information. Mr. RIEHLMAN. There is a question here, and I think it is very appropriate and pertinent at this time. On your vehicle sale here, where you have a million dollars acquisition and you have a return of $144,000, actually that is used for replacement purposes; is it not? Mr. BALWAN. That is a replacement account? Colonel PACKARD. Yes, sir; it is.

Mr. RIEHLMAN. Then, why is that included in the surplus account when it really does not go into the surplus account? It should be taken out of there, and if it were taken out your percentage would be a lot lower than it is at the present time.

Colonel PACKARD. That is true.

Mr. BALWAN. Your sales actually specify that these items are not in surplus so that you actually have about a 10-percent return which boosts your average. On waste and scrap you use 100 percent recovery. So, if you take out the acquisition cost and revenue from scrap where you are using a 100-percent return figure, in averaging with your total figure, plus the replacement account, your percentage of return down here is going to be very low.

Mr. HOLIFIELD. In other words, that figure at the bottom of revenue should be 90,000.

SEVERAL PERSONS. That's right.

Colonel PACKARD. Of course, that vehicle return is a revenue to the Government.

Mr. RIEHLMAN. It is actually not a return as far as surplus property is concerned. It is a return to the Air Force, but it should not be figured into the percentage that is returned on acquisition cost in surplus property.

Colonel PACKARD. Not in this category. We probably should have another category which would break that down.

Mr. RIEHLMAN. Well, I think that this would break it down and give a truer picture of the percentage.

Mr. BALWAN. Actually, class 27 (vehicles) line items are of such a nature that you will normally receive a higher return. It is this usable equipment which results in economy almost automatically.

Mr. HOLIFIELD. It very definitely is a different category?
Mr. RIEHLMAN. Yes.

Colonel RAMME. Getting back to the Disposal Division Base Organization, we have included in the brochure, also, the detailed functions of all of these organizations and a list of the personnel assigned by

name.

Mr. MORRIS. One thing I was wondering about-this merger of the Excess Branch and the Surplus Branch in the new Disposal Divisiondid that reorganization result in a shortening of the length of time between the time when the authority for disposal of property is re

ceived by the base and the property is actually sold? As we understand it, there is often a period of months between the time the base is notified that they could actually dispose of property which formerly was excess and being screened and the time when the invitations are actually sent out for material. There may be a lapse of 2, 3, 4 months between.

Colonel RAMME. In anticipation that you might ask how long would it take on some of these items, we went down into the warehouse and took five items-picked at random-that were on bid and checked those back through to find out when they came to Salvage and when they went into Reclamation, when they went on SF-120's, and when we got the answer.

Mr. MORRIS. It was that last time lag I was talking about the one between the actual sale and the authority for disposal.

Colonel RAMME. These 5 items, which are currently all on 1 bid, arrived in the disposal yard-1 on the 22d of October, 2 weeks ago; 1 on the 24th of July; 1 on the 27th of August, and the other 2 on the 20th of August. We have a period of about 3 months of accumulation there.

Mr. RIEHLMAN. When were the invitations to bid issued?

Colonel RAMME. Last week. The bid opening is a week from today and the longest bids are about 3 weeks. It is about 2 weeks ago that the bids went out.

Mr. HOLIFIELD. You would say that 90 days would cover your timelag between notification and actual disposal?

Colonel RAMME. It's a time of accumulation of the property in sufficient quantity to sell.

Mr. HOLIFIELD. Yes.

Mr. MORRIS. This reorganization did not materially affect that timelag?

Colonel RAMME. No, sir, not materially.

Colonel PACKARD. Mr. Morris, it did not materially affect the processing time because, of course, the processing time which you are specifically talking about is outside of AMC control. It did assist in getting the property on SF 120 forms a lot faster. You see, previously, all this class 27 property that was excess was the responsibility of each individual stock record clerk who had to do all her processing, requisitioning, computation requirements, and everything else. It was just another job to her or to him.

Mr. MORRIS. To a unit which was handling active stocks also?

Colonel PACKARD. That is right. By taking it and segregating it out and giving it to individual people and saying, "Here is so much class 27 property, this is your job to move it", they could put it on 120's. By breaking it out, recognizing the problem and giving it to individual people, then it moves. Now, that is a corollary to your problem, but it certainly starts property moving faster.

Colonel RAMME. Now, the chief of this organization is Captain Reese. He is on leave back at the east coast, and we did not call him back. The senior civilian of this organization is Mr. Peck, GS-7. Mr. BALWAN. Is he here?

Colonel RAMME. Yes, sir. Mr. Peck has been the senior civilian in the Disposal Division, formerly the Disposal Branch, for 2 years. He has 12 years' service, all within the supply directorate here at this base.

Captain Reese has 22 years military service, 11 as enlisted personnel and 11 as an officer, and has been chief of this organization for 1 year.

MCCLELLAN AIR FORCE BASE EXHIBIT NO. 14

SENIOR MILITARY AND CIVILIAN DISPOSAL DIVISION

1. SENIOR MILITARY, DISPOSAL DIVISION

(a) Capt. Carl Reese, AO1576546, is a Reserve officer who began his service in July 1931 with the Indiana National Guard. He was commissioned in the Quartermaster Corps of the Army in 1942 upon completion of officer candidate school. His service as a commissioned officer has all been in supply, or related fields, and includes specific assignments as motor transportation officer, technical supply officer, procurement and production officer, stock control officer and squadron commander of a supply squadron. Captain Reese received a "spot" promotion to major in Korea, which he held from May 1950 to February 1951. He was assigned as property disposal officer at SMAMA on October 5, 1952, and has served in that capacity since that date.

(b) Captain Reese has attended the following service schools related to supply and/or disposal:

Quartermaster Officer Candidate School, 1942, Camp Lee, Va.
Quartermaster advance supply course, 1948, Camp Lee, Va.
USAF Property Disposal School, 1952, Hill AFB, Utah.

(c) Captain Reese attended the GSA reclamation conference in San Francisco, Calif., in 1953 and a disposal conference at Hq AMA in 1953. He has attended conferences and meetings held at SMAMA relative to supply and/or disposal.

2. SENIOR CIVILIAN, DISPOSAL DIVISION

(a) Mr. Raymond W. Peck began his Government career in February 1941 as a packer in the depot supply warehouse branch at McClellan AFB. Since that time he has had continuous service in supply with specific assignments as a junior storekeeper CAF-2 through principal storekeeper CAF-6 and junior warehouseman. He was promoted to supervisory surplus property disposal officer GS-7 on October 28, 1951.

(b) Mr. Peck has the following educational background relative to supply and/or disposal:

(1) Off-base training:

USAF Surplus Property Disposal School, 1953, Hill AFB, Utah
Scrap materials instruction, 1951, MAAMA, Middletown, Pa.

(2) On-base training:

Mechanized property accounting, 1949

Rubber conservation, 1945

Tech orders, 1943

Blueprint reading, 1943

(3) In addition, he has attended job relations, job methods, problems of handling employees, and job management. He has attended college for 21⁄2 years. (c) Mr. Peck has attend two conferences on disposal at AMC Headquarters. He has attended conferences and meetings held at SMAMA relative to supply and/or disposal.

Colonel RAMME. Both are graduates of the Air Force Disposal School.

MCCLELLAN AIR FORCE BASE EXHIBIT No. 15

ENGINE-DISPOSAL PROGRAM

The engine-disposal program at this depot consists of reclaiming parts of 900 each R3350-23A engines that are interchangeable with R3350-57M and AM engines. To date, 815 each of the 900 engines have been processed. The 815 engines reclaimed cost $25,102 each or $20,813,000. The interchangeable parts that have been reclaimed to date amount to $8,254,076. This does not include revenue received from engine skeletons sold as scrap metal. Nineteen each V1710-143, 18 each V1710-145, and 1 each V1710–35 engines were recently processed through reclamation. This entire engine was obsolete, therefore, no parts were reclaimed. Approximately 650 pounds of steel per engine were reclaimed.

Colonel RAMME. Now, some of our major disposal programs. I would like to mention them one at a time.

First is the engine-disposal program. We are not prime on engines. We are directed to dispose by the prime depot or by AMC. We are in the process of disposing of 900 obsolete 3350-23A engines. We have actually completed the cannibalization of 815 with still 85 to go.